Oil: U.S. crude closes gap with Brent, exports make it look superior of the two

Investing.com -- U.S. crude jumped Wednesday while prices for Brent remained lame. On the surface, it was a catch-up to the previous session when the international benchmark was up strongly while U.S. markets were closed for the 4th of July holiday. But a closer look at export numbers suggest a trend may be forming.

Government data revealed U.S. crude shipments for the week ended June 23 at or near record with a daily volume of 5.338 million barrels. In the previous week to June 16, the volume was 4.543M barrels per day. Earlier for the week ended June 9, exports were at 3.27M daily versus a prior 2.475M. 

Simply, the data from the Weekly Petroleum Status Report of the Energy Information Administration, or EIA, showed U.S. crude exports have more than doubled over the course of the three weeks, going from just under 2.5M to almost 5.4M.

And it’s a phenomenon that could grow as the Saudis continue slashing a one million barrels daily a month — on top of earlier commitments to cut 1.5M monthly — to try and get $80 pricing or more for a barrel Brent that will help push quotes on their own Arab Light crude.

The Saudi energy minister, who met his counterparts from the OPEC, or the Organization of the Petroleum Exporting Countries, at an industry event on Wednesday said the group would keep up with "continued efforts to support a stable and balanced oil market" -- coded language for cut-till-we-get-price-we want. 

“Some will say this jump in U.S. crude exports is perhaps an aberration in data," said John Kilduff, partner at New York energy hedge fund Again Capital. "But I think a trend might be forming here as U.S. crude is finding not just more demand in Asia from all these stated Saudi cuts, but also new homes in Europe."

“So, if you ask me, WTI is looking to be the more superior of the two crude brands here.”

New York-based WTI , or West Texas Intermediate, settled up $2.07, or 3%, at $71.79 per barrel.

London-based Brent finished up 40 cents, or 0.5%, at $76.65.

Market participants were also on the lookout for the next EIA iteration of the Weekly Petroleum Status that will arrive Thursday.

Prior to that, the American Petroleum Institute, or API, will release later today its own numbers on U.S. weekly oil inventory data, at approximately 16:30 ET (20:30 GMT) after market settlement. 

The API numbers will give a snapshot on the potential closing balances for U.S. crude, gasoline and distillates for the week ended July 30 and serve as a precursor to official inventory data on the same due from the EIA.

For last week, analysts tracked by Investing.com expect the EIA to report a crude stockpile drop of 0.729M barrels, on top of the 9.603M barrel plunge reported during the week to July 23.

On the gasoline inventory front, the consensus is for a build of 1.454M barrels over the 603,000-barrel rise in the previous week. Automotive fuel gasoline is the No. 1 U.S. fuel product.

With distillate stockpiles, the expectation is for a climb of 0.106M barrels versus the prior week’s gain of 0.124M. Distillates are refined into heating oil, diesel for trucks, buses, trains and ships and fuel for jets.